We live in an instantaneous society. Today, I can go to my smartphone, log onto the Internet and browse, select and purchase virtually anything (in my case, probably something to prepare for next year’s crawfish boil season). I can order food and have it delivered within half an hour, or I can order some toys for my dogs and have them delivered the next day. But many consumers have been searching for that same instant satisfaction when it comes to the payments industry. That reality is coming to the forefront with the advent of same-day ACH.
What is same-day ACH?
It’s a really big deal.
In the recent past, ACH payments were settled, at the soonest, on the next business day. Now, NACHA rule changes enable institutions to take advantage of same-day processing of ACH transactions — a big win for consumers and businesses alike. Now, as the first two phases of the three-phase roll out settle into the banking world, payment processors can submit payments for same-day processing within two windows: A morning submission deadline which allows settlement to occur at 1 p.m. EST, and an afternoon submission that allows for settlement to occur at 5 p.m.
The latest phase (phase 2) just went live in September 2017, and it focuses on transitioning from overnight ACH on debits to a same-day model. This allows for faster bill payment and more accurate account settlements — a benefit for businesses. This change also helps consumers: users can have a clearer, more accurate picture of their true account balances, and it allows for consumers to avoid late payments and fees if they’re facing a fast-approaching payment deadline.
As of now, there are some limitations.
The final phase isn’t set to launch until September 2018, but the buzz is already starting. The next phase will set out to add additional clearing windows: 10:30 AM EST and 2:45 PM EST with settlement occurring at 1:00 and 5:00 pm respectively. The new phase will include both debits and credits. However, there are a few restrictions.
According to NACHA, international payments and transactions over $25,000 are unable to be processed following this model at this time. Luckily, a vast majority of ACH transactions are eligible for same-day processing.
There are a number of cases in which businesses and consumers can benefit from same-day ACH transfers — whether with processing investments, payroll corrections or settling business-to-business transactions much more quickly. With phases 1 and 2 being widely accepted and celebrated, we wait with great anticipation to see how the third and final phase of same-day ACH rolls out in September 2018.
To learn more about Forte and ACH processing, check out our page.